Sprint Nextel Corporation (S) Beat Estimates, Posts Smaller Loss

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Sprint Nextel Corporation (NYSE:S) posted its first quarter 2013 results today, the losses of the company narrowed at 21 cents per share, which beat the analysts estimates. According to the analysts, the loss was estimated at 34 cents on average. Sales for the company improved marginally by 1 percent at $8.79 billion in comparison to an estimated $8.74 billion.

Sprint Nextel Corporation (S) Beat Estimates, Posts Smaller Loss

The yellow network has been working hard to provide better service and network to its customers to face the challenge of powerful competitors. For the first quarter, the average phone bill for contract customers was $62.47, an increase of $61.47 in the fourth quarter. The figure expected by analysts was $62.54.

The operating margin of the wireless business for the quarter came in at 19.2 percent, an increase over 14.6 percent from the previous year, not including excluding costs such as depreciation and amortization.

Sprint has been backed majorly by Apple Inc. (NASDAQ:AAPL) iPhone. The third largest network carrier in the United States sold 1.5 million iPhone’s per quarter, which is a flat volume over the two quarters. There was, however, some surge in demand during the holiday season as the demand increased and sales grew to 2.2 million iPhone’s. The total units of iPhone sold in this quarter, according to Sprint Nextel Corporation (NYSE:S), stand at 1.5 million units during the period ending March 30. Out of total sales of 5 million, 43 percent were to new customers.

Kansas based Sprint is facing the problem of customers shifting loyalty in the recent times and choosing other networks over it. The company, however, recorded its highest number of subscriptions this year at 53.9 million including the most number of prepaid subscribers volume standing at 16 million. The other division of Sprint, Sprint Nextel Corporation (NYSE:S) saw a decline in subscribers, which decreased the total subscribers by around 0.7 percent.

For 2013, the company is estimating adjusted operating income before depreciation and amortization to come in more or less similar to its pre-announced target of between $5.2 billion and $5.5 billion, not including costs of closing strategic transactions.

The board of Sprint Nextel Corporation (NYSE:S) is at present considering the acquisition offer worth $25.5 billion of No. 2 U.S. satellite TV service Dish Network Corp (NASDAQ:DISH). Sprint could not sell 70 percent of its stake in October to Softbank for $20.1 billion.

The sales of the Smartphones can be seen as the major reason of declining profit of the Sprint Nextel Corporation (NYSE:S), but on the other hand, the sales of devices is the key, which helps the network to attract the subscribers to use more data, which in turn increases revenue in the long run.

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